The goal of this project is to understand the interaction of Jab1 and BMP signaling during chondrocyte differentiation. BMP signaling is important for all aspects of cartilage and bone formation, bone healings, and joint and cartilage repair. BMP2- and BMP7-containing osteogenic implants have been used for bone regeneration in over one million patients worldwide in the treatment of long-bone nonunion and acute fracture and in spinal fusion. However, the clinical use of BMPs requires super-physiological doses, resulting in high cost and potential inflammatory side effects. Thus, improving BMP treatment efficacy is critical to ease physical pain and financial burdens on patients, their families, and or health system. Furthermore, mutations in BMP signaling components lead to severe human skeletal developmental defects. We have recently identified transcriptional cofactor Jab1 as a novel inhibitor of BMP signaling downstream effector Smad1/5. Jab1 plays essential roles during various developmental processes by modulating other transcription factors' function. Jab1 is broadly expressed during embryogenesis, including in the chondrocytes. However, the role of Jab1 in cartilage formation remains mostly unknown. In our preliminary study, the loss of Jab1 specifically in chondrocytes using the loxP/Cre system led to neonatal lethal chondrodysplasia in mice, demonstrating that Jab1 is essential for proper cartilage formation in vivo. Furthermore, gene expression profiling and ex vivo culture experiments with Jab1 deficient primary chondrocytes revealed increased expression of Smad1/5 and its downstream targets Ihh and Col10a1. Thus, we hypothesize that Jab1 regulates chondrocyte differentiation by directly repressing Smad1/5-mediated BMP signaling. In this study, we propose three specific aims to test this hypothesis. Aim 1 is to use complementary cellular and molecular approaches to delineate the underlying mechanism of Jab1-BMP signaling interaction in chondrocyte differentiation. Aim 2 is to determine the effect of the genetic manipulation of Jab1 expression (both gain- and loss-of-function), specifically in chondrocytes in an inducible manner, on BMP-mediated embryonic cartilage formation using histological and in situ analysis. Aim 3 is to use RNA-seq and ChIP-seq to investigate the direct Jab1 downstream targets in chondrocytes. Overall, this study will further our understanding of the essential role of Jab1 in BMP-mediated skeletal development and generate novel mutant mouse models for skeletal dysplasia research. Ultimately, new therapies based on controlling the Jab1-mediated inhibition of BMP signaling will open a new era in treating acute fracture, osteoarthritis, and the skeletal disorders associated with dys-regulated BMP signaling.